Due to its abundance and low market price, coal combustion is the largest source of energy production in the world, accounting for 40% of all electricity worldwide. In the USA it accounts for 45% of electricity generation, and approximately 75% in Australia.
Unfortunately, coal combustion is a major contributor to global greenhouse gas emissions as well, accounting for 30% of total anthropogenic carbon dioxide (CO2) emissions worldwide, and 72% of CO2 emissions from global power generation. In addition, non-power generation uses increase its contribution to global human CO2 emissions to a whopping 41% (as of 2005).
Coal Externalities
A major problem with coal is that its full costs are not reflected in its market price, and thus while we may seemingly purchase and burn coal cheaply, in reality we are paying a much higher cost in the long run, if we look at the big picture. Economists refer to the impacts on human and environmental health which are not reflected in the price of coal as "externalities". Those who benefit from the seemingly cheap electricity don't pay for these externalities directly, but the public eventually has to pay in the form of medical bills, environmental cleanups, etc.
In a new report published in the Annals of the New York Academy of Sciences, Epstein et al. (2011) do a full cost accounting for the life cycle of coal, taking these externalities into account. Among the factors included in this analysis were:
government coal subsidies
increased illness and mortality due to mining pollution
climate change from greenhouse gas emissions
particulates causing air pollution
loss of biodiversity
cost to taxpayers of environmental monitoring and cleanup
decreased property values
infrastructure damages from mudslides resulting from mountaintop removal
infrastructure damage from mine blasting
impacts of acid rain resulting from coal combustion byproducts
water pollution
Note that most of these external factors do not apply to most non-fossil fuel energy sources. The majority of the externality costs come from reduction in air quality, contribution to climate change, and impacts to public health. Epstein et al. find that the total cost of these externalities ranges from approximately 9 to 27 cents per kilowatt-hour (kWh) of electricity generated, with a median of approximately 18 cents per kWh. The authors note that this is a conservative estimate, because they have not accounted for every associated impact.
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